Where does money come from? From where does it get its value? How does it get into circulation? It all seems complicated, but understanding the basic elements of money is not difficult. Our current system has become needlessly complicated in order to hide the truth behind a smokescreen of technicalities. I wrote this simple allegory to illustrate the basic elements of money. These are the secrets that are kept hidden from common knowledge. You will not find it taught in colleges or universities, and you will not find any books with the complete truth, because they could never be published. Of course the masters of our money know that some people are going to question the money system (scheme), so there are plenty of good books that question our corrupt system and are quite accurate until they get into the area of offering solutions, then the solution is almost inevitably a gold standard. Read the following and you will understand why the gold standard is a deception designed to send those perceptive enough to question the money system scurrying off on a wild goose chase, to be hopelessly lost and confused, and maybe even talked into an appealing sounding gold investment.

The Alchemist who turned lead into gold

Long ago in the country of Outland there was a tiny village named Trope. In a small hovel at the edge of the village, lived an old Alchemist, who was working busily on his quest to turn lead into gold. It would have been any typical summer day in Trope except for one thing. On this day, the Alchemist had a stroke of luck, which would change the lives of everyone in Trope for ever.

A smile slowly proceeded across the Alchemist's crumpled face as he slowly poured the last ingredient into the vat of molten metal, lovingly stirring the concoction with a long heavy ladle. "Perfect" he said to himself as he began pouring the thick mixture from the ladle into the molds. "I've done it! I have finally discovered the secret of turning lead into gold. I shall become the wealthiest man to ever live".

Over the years while he obsessively worked on his project to turn lead into gold, the old Alchemist had experienced much trial and error; he used this time to construct a most cunning plan. He had day dreamed for many years of what he would do, if only he could turn lead into gold.

In those days, gold was used for ornamental purposes, for things such as bracelets and earrings. With this in mind, the old Alchemist reasoned to himself, that after he had produced a significant quantity of gold, one day everyone in Outland would have all the gold they could ever want. He deduced that if that day were to ever arrive, the desire for gold would diminish and its value fade away. This worried him immensely, for his ultimate fear was for gold to become as common as the lead from which it was made.

The Alchemist thought to himself, "I must keep my secret recipe in my head and never reveal it to any other person, and I must manufacture my gold in limited quantities only, that it may always be desirable." The medieval chemist, being a greedy man, was not happy with limiting the amount of gold, he could create. "I must discover a new use for my gold that will make it desirable to everyone, no matter how much I produce. I know there must be a way." he thought to himself. "There must be a way."

One day a brilliant idea burst into his head. "That's it!" His grin blossoming into an exuberant smile, revealing the total absence of teeth. "I shall make my gold into little round ingots, and I will call them coyens." This in Outlandish means token. "Then I will loan my coyens to the villagers for use as munee." This means wage in Outlandish. "I will convince the villagers to use my gold coyens as munee for their trade. My gold will then be in constant demand, no matter how much I produce. I will indeed become wealthy beyond belief!"

Gold! Willard was hesitating. Money, when it was a matter of electronic exchange, meant nothing.
There was no feeling of either wealth or poverty above a certain level.
The world was a matter of plastic cards and of slots and all the world transferred, transferred, transferred.
Gold was different. It had a feel. Each piece had a weight. Piled together, it had a gleaming beauty.
It was wealth one could appreciate and experience.

Of course people soon became tired of lugging tons of batteries around with them - and having to stand in line to get them charged up at the end of every work-day. Also, measuring the amount of charge transferred between your battery and that of the supermarket when buying a pound of carrots was always a matter of some dispute. Hence there came to be standard batteries with numerical displays on them to show how much charge remained. Places called banques sprang up where you could leave your batteries and read out their charge remotely. Exchanges allowed you to discharge your batteries *here* and to use an exactly equal amount of energy to charge up those of someone on the other side of the planet who wished to provide you with some physical goods. The inconvenience of physically storing all of that electricity made it more efficient for the banques to supply it to people who needed it, in exchange for electricity in return in the future. Over time, nobody was ever sure that the amount of electricity held in the banque was as much as the banque claimed to have stored - or owed to it.

Pretty soon, a shorthand word for "total amount of electricity" was needed - and that quirky unused '$' symbol on everyone's keyboard came to stand for some arbitrary amount of the stuff.

...so, the guy with the bananas ate all but one of his, and said the last one cost five coconuts.

"Fiat" currency is a tool. Broadly, it causes inflation when supply exceeds demand, and deflation when demand exceeds supply. Ideally, a little bit of inflation is good, in that it encourages a moderate level of use (investment, consumption), leading to real economic growth.

A tangible currency made from a limited supply of raw material tends towards deflation, which encourages hoarding, which discourages use, leading to real economic contraction.

Source: posted historical documents at Independence Mine State Park. This would work for a reference for a doctorate (or master's or school paper), but I'm sure someone will complain that it isn't a real source, as they can't verify it without getting out of bed and walking up the basement stairs. There, a real and verifiable source. Now what? Your assertion that verifying it is too hard, so you'll choose to not believe in reality?

I doubt that. A $100 bill is more likely to be circulated in situations where it may be exposed to germs, drugs, disease and whatnot.
Drugs, prostitution, illegal arms and whatnot are very likely to use $100 bills. People buying legitimate goods and services are more likely to use checks, credit or debit cards or smaller denomination bills.